Question

Which of the following sets of elements are common for both governmental financial statements and for-profit financial statements?

Answer 1

Both governmental financial statements and for-profit financial statements include sets of elements such as assets, liabilities and equity, and income and expenses.

Step-by-step explanation:

The sets of elements common to both governmental financial statements and for-profit financial statements include:

1. Assets: Both types of financial statements include information about the assets owned by the entity. This includes cash, accounts receivable, inventory, property, and equipment.
2. Liabilities and Equity: The financial statements of both types of entities provide information about the amounts owed to creditors (liabilities) and the ownership interests (equity).
3. Income and Expenses: Both types of financial statements include information about the revenues earned and expenses incurred by the entity.

These sets of elements help stakeholders assess the financial performance and position of both governmental and for-profit entities. However, there are specific differences in the presentation and classification of these elements between governmental and for-profit financial statements.